Investing, Asset Allocation, Economics & the Search for the Bottom Line

Major Asset Classes | October 2017 | Performance Review

Equities in emerging markets bounced back in October after a mild setback at the end of the third quarter. This slice of the global stock market gained 3.5%, posting last month’s strongest performance for the major asset classes. The rest of the field was mostly higher, with losses generally contained to foreign bonds and US real estate investment trusts.
MSCI Emerging Market Index’s 3.5% advance in October lifted the index to a sizzling 32.3% total return for the year-to-date results – the strongest gain so far in 2017 for the major asset classes.

Sovereign fixed-income securities in emerging markets, by contrast, suffered the biggest setback last month. Citi Emerging Market Government Bond Index tumbled 2.9% in October – the benchmark’s second month of red ink and its deepest decline in nearly a year.

Foreign bonds overall faced headwinds last month, partly due to a rebound in the US dollar. After falling against the major foreign currencies in September to its lowest level since early 2015, the US Dollar Index popped by 1.6% in the kickoff to Q4.

The broad trend for markets overall remained solidly positive in October. Indeed, the winning streak for the Global Market Index (GMI) rolled on for the eleventh straight month. GMI, an unmanaged benchmark that holds all the major asset classes in market-value weights, gained a healthy 1.3% last month. Year to date, the index is up a strong 14.1%.